Bakken – the Biggest Oil Resource in the United States?
Total Page:16
File Type:pdf, Size:1020Kb
Winter 2011 Oil & Natural Gas Program Newsletter Bakken – The Biggest Oil Resource in the United States? The announcement of the acquisition of large acreage positions in the Bakken play has become a fairly regular event. Leasing activity in the Bakken has exploded over the last five years and bonus payments per acre CONTENTS have jumped. Total lease bonus payments exceeded $100 million in 2009 (Figure 1). Bakken – The Biggest Oil Resource in the United States? ...1 The heightened acquisition activity is driven by the Bakken’s immense potential. In 2008, the United States Geological Survey (USGS) estimated Commentary ...................................2 that the U.S. portion of the Bakken formation contains between 3 and 4.3 Successful Oil Production in billion barrels (a mean of 3.63 billion barrels) of undiscovered, recoverable the Bakken Formation .................6 oil, ranking it among the very largest U.S. oil plays. The Bakken—An Unconventional Petroleum The number of producing wells and Reservoir System ................9 and volume of oil production has Crude Souring in the Bakken ....11 grown with the growth in leasing and drilling (Figure 2). Production Geomechanical Study has reached nearly 8 million barrels of the Bakken .................................13 per month from roughly 4500 Bakken Requires Outlet for producing wells. Increased Production ................. 16 E&P Snapshots ............................ 18 The Bakken Formation Upcoming Meetings and The Bakken petroleum system is Presentations ............................... 20 part of a larger depositional system CONTACTS laid down in the Williston Basin during the Phanerozoic period with Roy Long Figure 1: Lease payments in North Dakota’s portion sediments up to 16,000 feet thick. Technology Manager— of the Bakken Play have grown dramatically. The Bakken system covers parts Ultra-Deepwater, Strategic Source: North Dakota Oil & Gas Division/Rigzone. of North Dakota and Montana in Center for Natural Gas & Oil addition to parts of Saskatchewan 281-494-2520 and Manitoba, Canada and [email protected] includes the Bakken, Lower Lodgepole and Upper Three Forks Albert Yost Formations (Fig. 3). Technology Manager— The Bakken Formation is comprised Exploration & Production, of three distinct members, the Strategic Center for upper and lower Bakken’s organic Natural Gas & Oil rich shale layers, and the middle 304-285-4479 Bakken member, which is primarily [email protected] sandstone and siltstone. The middle Bakken is the primary reservoir rock, together with the Figure 2: Bakken oil production from 2000 to 2009. Lower Lodgepole and Upper Three Source: North Dakota Oil & Gas Division/Rigzone Forks, although all the Bakken 1 National Energy Commentary Technology Laboratory When the Amerada Petroleum Corporation brought 1450 Queen Avenue SW in the discovery well in the Williston Basin in early Albany, OR 97321 1951 it had every reason to be optimistic. In less than 541-967-5892 two years, the millionth barrel of oil was produced in 2175 University Avenue South the basin. By the end of December 1952, production Suite 201 from the basin stood at 356,000 barrels per month. Fairbanks, AK 99709 By any standards, things were going well. By the third 907-452-2559 anniversary of the initial well, in 1954, 15 oil fields had 3610 Collins Ferry Road been discovered and were being developed. By that P.O. Box 880 point, the Williston Basin was on its way to becoming Morgantown, WV 26507-0880 a significant oil producing region in the U.S. 304-285-4764 It is doubtful that many thought addition potential lay a bit deeper in 626 Cochrans Mill Road the basin, in a series of shale deposits called the Bakken. In the 1950’s P.O. Box 10940 shales were “marker” formations and potential reservoir seals. Over- Pittsburgh, PA 15236-0940 pressured shales were a drilling nuisance. Permeability in shales was so 412-386-4687 poor that little, if any, thought was given to their production potential. 13131 Dairy Ashford, Suite 225 There was no reason to believe that the new Williston play sat atop shale Sugar Land, TX 77478 formations that might contain as much, if not more, oil than any existing 281-494-2516 U.S. field. Visit the NETL website at: The potential of the Bakken formations was not raised until 1974 www.netl.doe.gov when two complementary papers (Dow, Wallace G., Application of oil-correlation and source rock data to exploration in Williston basin, and Customer Service: 1-800-553-7681 Williams, J.A., Characterization of oil types in Williston basin, American Association of Petroleum Geologists Bulletin, v. 58, p. 1253 – 1262 and E&P Focus is published by the p. 1243 – 1252, respectively) suggested that the Bakken was capable National Energy Technology of generating 10 billion barrels of oil. A spate of subsequent papers Laboratory to promote the through the mid 1990s brought the estimate as high as 500 billion exchange of information among barrels of oil potential. More recent estimates have put the size of the those involved in natural gas and oil operations, research, and resource at 3-4.5 billion barrels of recoverable reserves. development. In the last decade and a half, the potential of the Bakken has begun to be developed. As in shale gas, the progress of technology has been absolutely essential to successful development. And, as in shale gas, This newsletter is available the National Energy Technology Laboratory has been in the forefront online at http://www.netl. of technology development for oil-bearing shales, funding numerous doe.gov/E&P Focus projects to improve recovery, decrease footprints, and enhance safe, and environmentally responsible development of this important resource. A few of our efforts are examined in this issue. For more information on our Bakken-focused R&D, contact us at www.netl.doe.gov or access our Knowledge Management Database at www.netl.doe.gov/kmd. As always, your comments are welcome. John R. Duda Director, NETL Strategic Center for Natural Gas and Oil 2 Formation members have reservoir potential. The upper and lower Bakken Formation members are also source rocks. Laid down in the Devonian- Mississippian eras, the Bakken has a maximum thickness of approximately 150 feet. Porosity and permeabilities are, generally, low over most of the Bakken. A 2001 USGS paper by Pitman, Price and LeFever estimates average porosity and permeability in the Bakken at 5% and 0.04 millidarcies, although values vary widely over the play. Porosity is enhanced, in many cases, by natural fracture systems in the Bakken. The first Bakken wells were drilled in the early 1950’s. Production from these vertical wells was satisfactory but not high. Production in the Bakken did not take off until the introduction of horizontal wells in the late 1980s that produced a defined production spike through 1991 (Fig. 4). Introduction of extended reach horizontals with giant, multi-stage frac jobs produced another, much more dramatic, upward trend beginning in 2002- 2003. These massive frac jobs are applied over extended laterals of up to 10,000 feet. Frac jobs of 24 to 28 stages are not unusual. Activity There are a number of new and emerging fields in the Bakken play. Most important, and most productive, is the Elm Coulee Field, discovered in 2000 by LYCO Energy. The field, located in Richland County, MT, has produced in excess of 41 million barrels of oil and 24 BCF gas from over 400 horizontal wells. The field is being developed using horizontal drilling in the middle member of the Bakken. The wells generally are fracture stimulated with gelled water and sand (~5,000 barrels of gelled water and 400,000 pounds of sand per horizontal lateral). The area was targeted for vertical drilling in the late 1990s and horizontal drilling began in 2001. Figure 4: Bakken Montana and North Dakota daily production rates 1971-2007 illustrating the impact of horizontal wells and multi-stage fracturing. Figure 3: Map of the Bakken Shale play with significant fields Source: www.theoildrum.com identified. Source: Energy Information Administration, U.S. Department of Energy 3 The middle Bakken in this area is interpreted to be a dolomitized carbonate bar complex. The reservoir is developed over a large area (450 square miles) and has relatively low porosity (8-10%) and permeability (average of 0.05 md). Natural fracturing is thought to contribute to production. Initial production from wells ranges from 200 to 1900 BOPD. The field is being developed on 640 and 1280 acre spacing. Estimated recovery per well is 350 to 600 thousand barrels. Estimated ultimate recovery for the field is greater than 200 million barrels (Sarg, 2010). The Parshall Field, discovered in 2006, is located on the east side of the Nessen Anticline and produces from the middle Bakken. Through April 2010, the field had produced approximately 32 million barrels of oil and 13 Bcf of gas from 228 wells. The field connects to the Sanish Field on the West and the Ross Field to the north (Sonnenberg, 2010). Key Bakken Players Activity levels have increased exponentially in the Bakken. The North Dakota rig count has exploded over the last 12 months, as indicated in the chart below, due to development of the play (Figure 5). Those rigs are operating, primarily, for the top 20 Bakken players defined by acreage. Among them, these 20 operators hold nearly 5.5 million acres of prime Bakken acreage. The top three players control over 2 million acres in the Bakken (Figure 6). Continental Resources is the number one driller and lease holder in Bakken as of November 2010, with 864,559 net acres. In 2009, Continental performed the first 24-hour continuous frac in the North Dakota portion of the play. In 2010, Continental developed the ECO-Pad® drilling concept, a system whereby the company drills multiple horizontal wells from a single pad with zero boundary-line setbacks.